Nifty Weekly Update

Weekly technical Analysis for week ended 25th December 2010.
Nifty opened on a positive note but not a strong note and weekly close was nearly at the high of the week indicating some strength for bulls. One of the strongest point to be noted is that during the entire week the market did not go below the low of the previous weeks indicating that bulls were successful in keeping the bears away and their strength would be know or proved only if in the coming week if they take market further up and probably above 6100 which bears are finding difficult to break. In the coming week 6100 would be the lakshman rekha for the bulls and if it is taken out then bears would run for shelter. So keep a close watch on 6100 which would be make or break for bulls. Another point of strength for the market is that market was able to move above 50 day EMA has been able to maintain above it, thus now 50 day EMA would act as support for the nifty and till it stays above it we have all chances of nifty moving up and breach of the same would be disastrous for the bulls and it happens to be at 5957 so on lower side it should offer support. So nifty seems to be having resistance at 6100 and support at 5957 so any movement on either side would have huge impact on bulls or bears considering on which side it breaks out. If nifty moves above 6100 then it has chances of taking the market towards 6200 levels. So we have to see whether the market would move and close above those levels or not. i have been mentioning from so many months that we would be completing 21 months of continues rise in November 2010 and chances of market correcting there after and also historically market have rise for a maximum period of 23 months and second highest rise was for 21 months. And we now we have completed exactly 21 months of continues rise and we have entered the 22 months. We have made high in 21st month and started to correct from that month only. Historically we have not see markets correction starting in the month of November. What has happened historically is that markets have corrected in the month of November and in December upto first half of January the markets rise and there after the market falls. We have to see whether the same phenomenon repeats this time also .if this has to happen then we should see the market raising up and making a new high or just go near the high and then fall very fast in the month of January 2010.
One point which I have indicated during the last week is that nifty has broken the 21month trend line which is bearish for the market and is still below that line only indicating that bulls are loosing strength but has to confirm it by forming a lower low and still not confirmed the same. Any close blow 5300 only would confirm the bearishness for the market.
Positives for the market:
· Nifty is above 15 day EMA( moved above this during the week), 100 day EMA and 200 day EMA
· It has closed above 50 day EMA indicating strength for the bulls.
· Daily MACD has given a buy signal indicating/strengthening bulls and pointing towards further upside movement in the market. In the current uptrend whenever MACD has given a buy signal nifty has moved by around 250 to 300 points whether the same would happen this time also only time would tell.
· Weekly stochastic oscillators is in buy mode indicating strength of bulls.
Negatives for the market:
· Nifty is exactly at 50 day EMA whether it would offer as resistance now or not we have to see.
· Weekly MACD is in sell mode indicating weakness in the market and also every rise would be sold into.
· Daily stochastic is in sell mode indicating that bears has in short term gained upper hand but as the weekly stochastic is in buy mode it seems to indicate that every sell might be bought into.
Wolf wave:
One interesting pattern which majority of analyst’s seems to have over looked is the wolf wave(WW) principle. This is one of the power full pattern which gives the clear indication probable bear market in a raising market and bull market in a bear market. The bullish pattern was formed in October 2008 ( peak of bear market)when everything around and everybody was talking about perennial bear market and confirmed in march 2009 and you know after that we have see a very long bullish market .

Now it seems to have formed WW pattern and that too a bearish pattern but it is yet to confirm the same. I am now waiting for confirmation of the same. Once it is confirmed then bulls would run for shelter. One of the advantages about the pattern is that it also gives the target after the confirmation of the trend or the pattern. And believe you this time also the target is there but it would frighten bulls away and the target is somewhere” hold your breath” around 3200-3400 levels. You or anybody would not believe the target and would not heed to same. But believe me if the pattern is confirmed then we have all probable chances of seeing the target confirmed. Now you would be having a question as to when would the pattern be confirmed? yes it would be clearly be anybodies question. I would not maintain suspense, any weekly closely preferably monthly close below 5650 would levels would confirm the pattern. Bulls should hope the market not to close below that level any close below the same then they would run for shelter. So as far as bulls are concerned as per this pattern 5650 would be the lakshman rekha, till they are above that they would not have any problem once taken out it would be end of the bull market and bulls would be running for cover and we would be seeing nifty falling by atleast 2500 points from those levels. so watch out for 5650.
Elliott wave analysis:
The two alternative which I have indicated in my last week’s update still hold good and they are provided hereunder.. Under the alternative -1 we might have made a top in November at 6350 and we might have started the down move and we might see market moving up till around 6100-6200 levels and then moving down to around 5200 levels at-least.
Under alternative -2 it appears that we might have completed the wave-4 of the wave -5 and we might have just started the wave-5 of wave-5 and we should see whether it would take the market to a new high or not. If a new high is not made it would indicate a 5th wave failure and we can see market tanking from those levels. Till 5700 is not taken out this option would hold good if broken then the option one would hold good.
M.Sri Mahidar
Trend is Friend.
Sunday, December 26, 2010 20:09 IST

Weekly technical Analysis for week ended 18th December 2010.
Nifty opened on a strong note and has maintained at those levels whole during the week. One of the positive things during the week is that the market has closed nearly at the top during the week and also during the week it has not moved below the low of the week indicating the bulls were successful in maintaining at higher levels thus indicating their strength. It is appearing technically that the market might move up from current levels. Nifty has to move above 6069 to indicate further strength in the market any close above that on weekly basis has chances of taking the market towards 6200 levels. So we have to see whether the market would move and close above those levels or not. i have been mentioning from so many months that we would be completing 21 months of continues rise in November 2010 and chances of market correcting there after and also historically market have rise for a maximum period of 23 months and second highest rise was for 21 months. And we now we have completed exactly 21 months of continues rise and we have entered the 22 months. We have made high in 21st month and started to correct from that month only. Historically we have not see markets correction starting in the month of November. What has happened historically is that markets have corrected in the month of November and in December upto first half of January the markets rise and there after the market falls. We have to see whether the same phenomenon repeats this time also.if this has to happen then we should see the market raising up and making a new high or just go near the high and then fall very fast in the month of January 2010.
One of the point which is indicating the strength of the bears is that the market has broke the 21months trend line in the month of November. This is a very bearish indicating shows the strength of the bulls. Nifty has to move above that trend line to indicate any strength of bulls. This phenomenon has been observed three time earlier also in the last one year where in the trend line has been broken but the market has not corrected significantly and still there are maintaining below that trend lines.

It can be seen from the above chart that nifty has clearly broke the 21 month trend line and 21 happens to be a Fibonacci so the breakdown can be genuine so we have to see whether nifty move below or not.

It can be seen from the above chart that the nifty has given a break out in September 2010 and after that the same trend should offer itself as support and not it can be seen that it is clearly offering support at present so till this trend line (support line) is held there should be not problem for bulls and we can have all possible chances of nifty or market conquering new highs. So this trend line(support line) is crucial for the market. The trend line appears to be around 5700 levels so till this level is held there should be no problem for bulls and the day it is taken out we can see a very very steep and violent fall in the market. Till then bulls would enjoy the market.
Positives for the market:
· Nifty is above 15 day EMA( moved above this during the week), 100 day EMA and 200 day EMA
· It is exactly placed at the 50 day EMA any move or close above it would strengthen bulls.
· Daily MACD has given a buy signal indicating/strengthening bulls and pointing towards further upside movement in the market.
· Daily and weekly stochastic oscillators are in buy mode indicating strength of bulls.
Negatives for the market:
· Nifty is exactly at 50 day EMA whether it would offer as resistance now or not we have to see.
· Weekly MACD is in sell mode indicating weakness in the market and also every rise would be sold into.

Elliott wave analysis
I have indicated in my earlier update as per Elliott wave we have targets of around 6470, 6850 and 7140. We have to see whether the same would be achieved or not. if the market now moves up 6470 would offer a good amount of resistance from current levels.
There are two alternatives for the market as per Elliott wave which are furnished in the chart below:

The two alternative as per Elliott are furnished above. Under the alternative -1 we might have made a top in November at 6350 and we might have started the down move and we might see market moving up till around 6100-6200 levels and then moving down to around 5200 levels at-least.
Under alternative -2 it appears that we might have completed the wave-4 of the wave -5 and we might have just started the wave-5 of wave-5 and we should see whether it would take the market to a new high or not. If a new high is not made it would indicate a 5th wave failure and we can see market tanking from those levels. Till 5700 is not taken out this option would hold good if broken then the option one would hold good.
M.Sri Mahidar
Trend is Friend.

Sunday, December 19, 2010

Bank Nifty

SBI

Nifty ELliott update

Weekly Update

Weekly technical Analysis for week ended 11th December 2010.
Nifty opened on a weak note and was weak for the entire week except for Friday where market has risen from oversold levels. The movement during the week is clearly indicating strength of the bears as they did not allow the bulls to lift even their head. But one of the features of the week is the nifty has made a lower top for the first time after so many months. The market has went up but was not able to move above 6100 which is below 6300 high made in November indicating formation of lower top. But one of the positive features of the current week’s movement is that the market did not move below the low of November at around 5700 indicating that bulls were able to support at the that level. So till that bottom is held we can assume that the bull run is intact and any movement below that would indicate the formation of lower low and possible start/ confirmation of the bear market. Nifty has moved below the 15 day EMA and also the 50 day EMA indicating weakness and at present taking support at the 100 day EMA it has taken support at 100 day EMA twice during the last 15 days which is indicating that 100 day EMA would provide a good support level for the market and any weekly close below that would be a significant event and it can possibly take market towards 200 day EMA which happens to be at around 5500 levels. As of now 50 day EMA is acting a resistance and nifty has to move above that to indicate strength. But till the 6100 is taken out the short term trend as per daily charts can be said to be down.

One of the factor which is pointing toward the probable top of the market in November is the constituents of nifty have been damaged badly in the current onslaught. Surprisingly constituents of nifty appears to be more bearish than nifty itself. And another noticing feature is that the bank nifty( index of banking stocks) has around 25% weight in the nifty and it has confirmed the commencement of the down trend technically as it has formed a lower low and another heavy weight RIL is also indicating weakness technically. except IT pack nothing is looking rosy technically so all these are pointing towards possible downside in the market. so unless and other wise something spectacular happens in the market the bears appears to have say in future of the market.

Nifty has just not completed 21 months of continues rise from march 2009 and 21 happens to be a Fibonacci and there are all chances of market correcting after this Fibonacci. I have been indicting this from last so many months and the same seems to have happened. Another point which I have been indicating is that from inception onwards nifty as rise continually above 20 months only twice and maximum was 23 months which ended in may 2006 and next was 20 months which ended in January 2008 and in all these two occasions markets have corrected by min 61.8% of the rise. so historically also technicals are not supporting nifty. so unless and other some thing positive happens in the market or nifty goes on to make a new high the chances of bulls taking control of the market are thin.
Positives for Nifty:
§ Market is above 100 day and 200 day EMA.
Negatives for nifty:
§ Market is below 15 day and 50 day EMA.
§ Daily and weekly MACD is in sell mode.
§ Weekly RSI has started to move down from over sold levels and now at 59 any move below 50 would not be good for the market.
§ Daily stochastic is in sell mode
§ Weekly stochastic is in sell mode.
§ -D1 is moving up and +D1 is moving down and at very low levels. and DMI has again moved above 20 and is moving up indicating the down move might have set in.

Elliott wave analysis: There is not much change in the elliotte wave analysis the targets of 6425, 6811 and 7094 still hold good and we have to see whether the same would be achieved or not. I have some hope on achieving 6427 but doubt on remaining two. If we make a new high we have chances of seeing 6811 or near it with +/-100 points. Any close below 5300 would confirm the end of the up move.
The last wave which has started from around 5300 and ended at around 6350 levels has taken 47 days and the current down move has till now completed 24 days and we have to see the market below 5300 in next at-least 20 days to confirm the end of the up move. So the next 20 trading days are going to be crucial for the market as any move and close below 5300 would confirm the down trend and if not we can see nifty moving up and making a new high.

M.Sri Mahidar
Sunday 12th December 2010, Time 21.09 IST
Trend is friend

Bank nifty

ICICI

AXIS

HDFC bank

Bank nifty

tata Motors

Tata Motors

NIFTY

NIFTY

CNX-IT

Nifty

NIFTY

Weekly technical Analysis for week ended 27th November 2010.
Market has opened on Monday on a positive note moved near the high of last Friday and there after the next four days it has fallen vertically indicating that bears have taken control over the market for the first time. Market has closed in red for three consecutive weeks. This is the second time in this up move from March 2009 that it has closed in negative territory for three consiquetive weeks. Maximum periods of consiquetive weekly closes is four weeks in the entire run. We have to see whether this would be arrested after three weeks or would continue for another week. One of the noticing features of the movement of the nifty during this week is that it has also closed below 100 day EMA. The last week it has closed below 50 day EMA and this week it has closed below 100 day EMA which clearly indicates that bears are slowly coming into the market and has chances of taking the market further down. The closing of nifty below 5900 for two consecutive weeks is not good for bulls and nifty and bears would have been laughing at the same time as they has got an opportunity after a long time. One of the important points for bulls is the market should recover from current levels and move very swiftly towards the high of 6300 other wise its all over for bulls and we can expect a prolonged down move in the market which can last for atleast 6 months so nearly the first half of the next year should be good news for bears and bad news for bulls. So if the market does not move above 6300 in the up move which is expected to materialize in the coming weeks the we can be sure that we are in for a bad market for the bulls. One point to be noted that there have been very very heavy volumes on Friday fall which is just giving an indication that atleast we have made a temporary (short term) support for the market

One of the worrying feature of the market is that the charts of the individual stocks have damaged more that that of the index which is clearly indicating that the broader market is bearing the brunt of the bear onslaught and it is yet to be indicated by the indices. When the stocks appear to be more weak than the indices then we have all fair chances of market moving in the direction pointed by stocks. One worrying feature also is that we are seeing continues increase of stocks making a new 52 weeks lows indicating that the bears are becoming active.

I have been indicating for the last so many months that we would be completing 21 months in the month of November and we can expect to see market moving down there after i.e. in December or January and it appears that we might have started the down move from 21st month only. If we see the exact date of low for nifty in March 2009 it is 6th march 2009 so we must be completing 21 months on 6th December 2010 and we are just near that. If the market does not recover from here the we are in for a rude shock for bulls. In January 2008 also market has started to correct from 21st months onwards will this happen this time also.

Historically seeing market have never topped in November. Historically November has been bad month for bulls and in December markets recover and try to make a new high or go near it and then they collapse like nine pins from January onwards. Historically January of the years have been marked with start of the bear market and when ever it has happened then the bear markets lasted for long atleast for 6 months. So whether the markets move up now in December and there after start down move from January onwards or continue to move down we have to wait and see. Markets generally surprise every body so this time also they might have surprised every body by starting to move down from November.

If you apply Fibonacci time periods to bulls and bear market. The bear market lasted for around 13 months and current bull market lasted for around 21 months which happens to be exactly 161.8% if the time taken to fall so have we formed double top now? Only time would tell. If you are following the analysts in the market or following on television (which I donot like) non of the analyst has indicted the phenomenon of double top (refer chart below) every body was busy in projection of the market further upward and have collectively ignored the concept of double top and till now they have not calling it a top. This is one of the strong indications that the market might have topped out as when every body ignores major technical formation that is generally the top. If you see the other technical parameters line RSI and MACD etc., there was a major –ve divergence in daily charts ( refer chart 2 below) which has also been ignored by the market analysts. Generally analysts are carried away by one side of the market that they ignore any warning signs and this time also it seems they have ignored that signal. Even in the January top they have ignored the warning and also the negative divergences and we know that what has happened.

Positives for Nifty:

§ Market is above 200 day EMA.
Negatives for nifty:
§ Market is below 15 day and 50 day EMA.
§ Market is below 100 day EMA
§ Daily and weekly MACD is in sell mode.
§ Weekly RSI has started to move down from over sold levels and now at 52 any move below 50 would not be good for the market.
§ Daily stochastic is in oversold positing indicating that prices are closing at the lower end of the trading range. Any up move of the Stochastic oscillators has chances of taking the market up.
§ Weekly stochastic is in sell mode.
§ -D1 is moving up and +D1 is moving down and at very low levels. and DMI has again moved above 20 indicating the down move might have set in.

Elliott wave analysis: There is not much change in the elliotte wave analysis the targets of 6425, 6811 and 7094 still hold good and we have to see whether the same would be achieved or not. I have some hope on achieving 6427 but doubt on remaining two. If we make a new high we have chances of seeing 6811 or near it with +/-100 points.

M.Sri Mahidar
Sunday 29th November 2010, Time 19.25 IST
Trend is friend

Canara Bank

PNB

Axis

Hero Honda

Larsen and Toubro.

Nifty

NIfty Update

Nifty has been falling relentlesly for last two weeks and during the same period it has broken below so many curcial support levels, which is pointing that the market might have topped out at around 6335 levels. if its so, them the market might have formed a double top which would thus indicate a healthy correction which migh be more severe than what has been seen in last two years. We have been seeing scams one after another and now a new one in banking sector. it appers that all these might take the market to a different trejectory on the down side. if the anticipated correction has set in we might see severe erosion in the stock prices in the months to come. so it appears that it is better for the bulls to tighten their belts i.e stop losses should be now verified and strightly adhered to.

NIfty

NIfty

Bank Nifty

Nifty Weekly update

Weekly technical Analysis for week ended 19th November 2010.
Nifty opened on a weak note and formed a green candle on 15th and there after started to fall and continued for the next three days. Of the last ten trading days there have been nine red candles and nifty has fallen by nearly 15% indicating that bears have offlate become strong and are trying to take the market down. One of the noticing features of the current move is that nifty has fully retraced the previous up move and closed below the low of the previous up wave. The previous up wave started from 5937 and ended at around 6338 on diwali day and there after the market has been moving down and has closed below that level on weekly basis which clearly indicates that bears were able to take the market below the low of the previous up wave thus signifying their superiority in the market. The weekly close below 5900 is not very good for bulls. Nifty has also made a nine weeks low and closed at the nine week low which clearly signifies the strength of the move. Now the bulls should immediately take the market up to show their strength otherwise its all over for bulls. Now the main point to be seen is whether the up move would take the market to a new high or not. If we go by the history of the current move nifty has bounced with vengeance whenever it has made such nine to 10 weeks low and every time it has succeeded in making a new high whether it would do this time also we have to wait and watch. If it doesn’t make a new high then we can safely assume that we have made a significant top which would not be broken in months to come.
One point to be noted is that nifty has closed blow the 50 day EMA for the first time in the current up move from the end of May 2010. This is a significant achievement for the bulls. When ever the weekly close was below the 50 day EMA the bulls have came back with vengeance whether this time also they would do we have to see whether the 50 day EMA offers resistance or not.

Now we would see what has happened in November months historically and what has followed after that. Historically speaking all the November months have not bee good for bulls. Generally and strangely in the second half of November the market tanks and generally it moves blow the low of the previous months and in the last weeks of November the up move noticed which goes on to make a new high in December and continued till the first week of January and then the market drops forming a major tops which is generally not broken at-least for next six months. we have to see whether the same repeats or not.

What Fibonacci is saying as I have been indicating that we would be completing the 21 months upside in November and after that we have all the chances of correcting and probably from January 2011 onwards. Whether this would be followed or not we have to see. As important Fibonacci period for the market is nearing to complete we have to be careful in our investments in the coming two months as we might see generally in such long up moves there is spill over effect where market continues for another month or two and makes a new high there by creating an euphoria in the market that its all over for bears and its only bull that’s left over. It may also be noted that the volumes during these periods would be very very high, resulting in distribution and there after the market tanks. This has been the history. If we see historically I have indicated previously that Indian markets have risen up to and maximum of 23 months only in 2006 and there after it has risen maximum for 20 months ending in January 2008. Now we have risen for 21 months which happens to be second highest in the history of the market (I am referring to nifty). So history is pointing that we might be forming a significant top in the coming month or so. Whether this would happen or not is a billion doller question. But it just warns us to be careful in taking investment decision. And mind you when ever the market has risen by 21 months or so we have corrected nearly around 70% of the entire rise till that date. This signifies that we might fall by around 2500 points (nifty) which would take the market to around 4000 levels. It appears to be unbelievable now but finally we would be seeing that target when ever the correction sets in.

One point to be noted is that till now there is no negative divergence in weekly or daily charts which is a significant achievement. But generally market develops –ve divergences in the final up move. Whether this would happen this time also, I have no doubt.

Positives for Nifty:
§ Market is above 200 day EMA.
§ Market is above 100 day EMA.
§ Weekly MACD is in a buy mode.
§ It may be noted that weekly DMI has moved above 30 for the first time in the entire up from march 2009 indicating that bulls are at the strongest point in the last one and half year. But now +D is moving down and –D is moving up indicating that gears might be shifting. But still weekly DMI is pointing upwards.

Negatives for nifty:
§ Market is below 15 day and 50 day EMA.
§ Weekly RSI has started to move down from over sold levels and now at 56 any move below 50 would not augur well for the bulls.
§ Daily stochastic is in oversold positing indicating that prices are closing at the lower end of the trading range. Any up move of the Stochastic oscillators has chances of taking the market up.
§ Weekly stochastic is in sell mode.
§ +D is moving down and –D is moving up and DMI has started to move up after flat and now at 24 this week it has moved from 22 to 24 thus indicating the bears might be gaining upper hand.

Elliott wave analysis:

There is not much change in the elliotte wave analysis the targets of 6425, 6811 and 7094 still hold good and we have to see whether the same would be achieved or not. I have some hope on achieving 6427 but doubt on remaining two. If we make a new high we have chances of seeing 6811 or near it with +/-100 points.

M.Sri Mahidar
Sunday 19th November 2010, Time 20.01 IST
Trend is friend

Nifty

World Indices

NIFTY

sathavana Ispat

Geometric

Dharani Sugars

Rcom